China’s President Xi Jinping is showing his global power by brokering a deal between the Kingdom of Saudi Arabia and the Islamic State of Iran. The two countries have been at odds for generations, but China brokered a deal to reestablish diplomatic relations between the two Middle Eastern countries.
While U.S. officials have been downplaying it, China and its allies have been hailing it as the latest and most visible signal that the American Century, where the United States was the richest and most powerful nation on earth, is ending.
The start of the American Century
At the end of World War II, there was only one nation on earth that hadn’t been decimated by war, the United States. Because it was physically separated from the war, the U.S. came out the hero, liberating much of the world from the tyranny of Nazi Germany, Mussolini’s Italy, and the Japanese Empire’s desire for world domination.
Fast forward to today - China still considered a "developing nation" by the World Bank and the International Monetary Fund, has just brokered a deal between Saudi Arabia and Iran for peace between the two nations.
President Xi Jinping is pushing to make the Chinese Yuan, not the U.S. dollar, the currency of international trade. Both China and India are seeking to knock the dollar from its dominance, both starting in Africa. The President of Kenya warned people should get rid of their dollars and choose the Chinese Yuan.
How did we get here?
The United States government has no real long-term plans, whereas China has plans that will take forty years to execute.
One such plan, the One Belt One Road Initiative, will build a highway system that stretches from Beijing to London, with detours into Africa and the Arabian Peninsula. Scheduled to be completed by 2049, this road system would give Beijing the ability to send likely autonomous trucks from factories in China straight to Europe without a need for ships.
Xi is also overseeing a new maritime Silk Road that will ship goods through the Indian Ocean to Sri Lanka, Kenya, Greece, and Italy.
Is it the debt?
Many people blame the United States' problems on the national debt. While there will need to solve that debt, China also has massive debt, 102% of its GDP. The U.S.'s debt is still higher, at 122% of GDP and larger since the U.S. GDP is $23 trillion and China's GDP is $18 trillion.
While much is made of China owning U.S. debt, China only owns about 20 percent of foreign-owned U.S. debt, which represents only about 5 to 7 percent of total U.S. debt.
U.S. debt is not the only issue. While our leaders get embroiled in culture wars, China focused on growing its reach using money, not military. While the United States gives away more money than any other country, China has created a system where they demand loyalty from the countries that benefit from the money they’re given.
China is also spending money on defense, but not nearly at the level of the U.S. The U.S. spent $767.8 billion in 2021 versus Chinas’ $270 billion. India, with over a billion people, only spent $73.6 billion.
Intellectual property
According to a congressional report, Chinese intellectual property theft costs $225 to 600 billion per year. One in five corporations in the United States say China stole their intellectual property.
One way that China has been able to legally get intellectual property and designs is that the government sometimes forces foreign companies to partner with local firms. The local company has access to everything the foreign company has. China is within its legal rights to force the partnerships, and then there is no violation of intellectual property rights. Many major firms, including Apple, have complained that Chinese firms have stolen their property and ideas.
The other side of that coin is that American firms have been more than willing to give up their intellectual property to save money on labor in the nation. China is fast becoming the richest country in the world, surpassing the United States, because so many items sold in the U.S. economy are made in China.
The United States receives one-sixth of Chinese exports. Sales to the U.S. represented $2.69 trillion in 2021, by far the largest exporter to the U.S. and creating the largest trade deficit in the world.
The current situation in the U.S.
While American leaders spend their time looking at Hunter Biden's laptop and playing politics over abortion and transgender people, the Chinese have presented a single face to the world that shows them prepared to knock the U.S. off the top of the hill. A recent indication of how far American politicians have strayed from their own sources of information, several Congressional leaders were caught quoting Chinese propaganda in their questioning of Administration officials. Those "gotcha" moments show how well China has been able to create a propaganda machine that fools even those who should clearly know better.
While it’s tempting to blame the president in office or the last one that one doesn’t like, every president since Richard Nixon has appeased China, and American companies have been putting profits over the power of the nation their companies were born in.
Bob Peryea
National Correspondent
The Kentucky Daily